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How to start a Food Business: Registration and Licenses Needed

Read our guide on how to start a food business in India.
Written by:
Shivi Gupta
Published on
25-Jul-18

One of the most trending businesses in India right now is the food business! New food joints and even online food business that deliver food to our door steps have gained massive popularity among the youth. Additionally, a food business in India is one of the most profitable businesses, with a one-time legal and financial investment. 

What is a food business?

A food business is any business that is involved in the manufacturing, importing, processing, packaging, storing, selling or distributing any kind of food in India. A food business in India offers the following food services to the general public:

  • Restaurants

  • Catering Services

  • Bakery 

  • Sweet shop 

  • Cafe 

  • Warehouse

  • Homemade Food Business like homemade chocolates, pickles, jams, etc.

  • Food Truck

 

If a food business has an online presence, it is termed as a FoodTech. The online food business has its own website and/or mobile application and renders food services over the internet to its users. An online food business includes home delivery of groceries, online food delivery aggregators, e-sellers, etc. 

To start a food business in India, a business needs to comply with several laws and obtain different licenses to carry out services and sell food products. Any negligence could land the food business in a soup! It is imperative to consult a startup lawyer in India to understand the legal formalities required to start a food business in India. (Email us at info@myadvo.in or call us at +919811782573)

To solve this legal conundrum, MyAdvo has created a tell-all guide for every registration and licenses required to start a food business in India:

Business structure:

To start a food business in India, the first thing a business has to do is to finalise a legal structure into which the food business will be registered. The most preferred business structure in India is a Limited Liability Company (LLC), Limited Liability Partnership (LLP) or a Sole Proprietorship. A business may also opt for one person company registration

Tax Compliance:

A business needs to complete its GST registration and get a GSTIN number to start a food business in India. Other compliances to start a food business in India include: 

  • PAN or Permanent Account Number card.

  • Professional Tax License for employing salaried staff. The tax is paid to every employee that earns Rs. 10,000 or more in a month.

  • No Objection Certificate or NOC from at least three neighbours.

Licenses required to start a food business in India:

Any business involved in any of the above-mentioned activities is a Food Business Operator and needs to obtain the following licenses to start a food business in India:

FSSAI License: FSSAI stands for Food Safety and Standards Authority of India. It is mandatory to obtain a license from the FSSAI to run a food business in India.  

  • A food business that has an annual turnover of up to Rs. 12 lakhs, only a basic FSSAI registration is needed.

  • A food business that has an annual turnover of up to Rs. 20 crores and operates in only one state, a State FSSAI license is needed. 

  • A food business that has an annual turnover of more than Rs. 20 crores and operates in multiple states, a Central FSSAI license is needed.

An application form is sent to the Licensing Authority along with registration fees, which can now be paid online as well. On registration, a FSSAI number is given to the business. This number is printed on every food package manufactured or processed by the business.

Registration under the Shops and Establishments Act: A food business has to register under the Shop and Establishments Act of the State in which its business is located. A Shop and Establishment Certificate can be obtained by filling out a form, paying the requisite fees and attaching relevant documents to it. 

Health Trade License: A health trade license allows a business to trade in any items or services which have a direct impact on public health. A food business that has this license from the Municipal Corporation, is certified to be in compliance with hygiene and safety standards.A Health Trade license is issued by the Municipal Corporation or the health department of the State in which the business carries out its trade activities.

Liquor License: If the business wishes to serve alcohol within its premises, then it needs to apply for a liquor license by filling out the relevant forms. The local Excise Commissioner grants this license to any food business that wants to serve any drinks containing liquor. 

NOC from the Chief Fire Officer: To obtain a NOC- No Objection Certificate, the business has to submit its building plans, model of the building and certificate of an Architect, and fill out a questionnaire with the Chief Fire Officer.

Eating House License: An Eating House license is required for any business where the general public is admitted and any kind of food or drink is served for the public's consumption. An eating-house license can be obtained from the State Police Commissioner.

Environmental Clearance: This license can be obtained from the State or City Pollution Board. This license is granted once the authority evaluates the scope and impact of the business on the environment. 

Signage License: A signage license allows a food business to advertise it by putting up any words, signs or pictures. Your food business is required to file an application with the local Municipal body to obtain a signage license in India and publicly display signs outside its business premises.

License for playing music or videos: To ensure that the business doesn’t breach the Copyright inherited in pre-recorded music or songs, the business requires a license to play music or videos. This license is obtained from the Phonographic Performance Limited. A food business opening a restaurant or cafe needs this permit to play music or videos. 

The legal formalities required to start a food business in India are highly complicated and tend to confuse food business aspirants! It is advised to consult a startup lawyer in India who can take care of every registration and licenses required to start a food business in India. Get connected to the best lawyers in India through MyAdvo. Email us at info@myadvo.in or call us at +919811782573.